Published on August 13th, 2013 | by Daniel Sherman Fernandez


Fuji Heavy Industries’s stock has risen the most since 2012

Profits and sales are heading toward record levels as Fuji Heavy benefits more than most other Japanese automakers from the yen’s weakening and as new models such as the BRZ sports car have grown so popular that U.S. consumers have to wait months to buy one.The success is leading Fuji Heavy President Yasuyuki Yoshinaga to worry whether Subaru, the niche maker of all-wheel-drive vehicles, is getting too big.

“We’re standing at a major turning point for Subaru,” Yoshinaga said in an interview in Tokyo this week. “It shouldn’t just be about volume. We should be making cars only Subaru can make, which are a little more expensive and profitable than the competition.”

Debate is raging internally on whether to expand Subaru’s vehicle lineup, mount a push for cheaper cars for markets such as India’s or stick to its strong-selling models, Yoshinaga, 59, said. Executives at Fuji Heavy, which counts Toyota Motor Corp. as its biggest shareholder, will begin discussions this month through next year to determine the long-term direction of Subaru, he said.

“Some people in the company may want to make mass-market products or cheaper cars, but is this really the right direction for Subaru?” Yoshinaga asked. “We’re not a carmaker that can grow as big as Toyota. And even if we could, reaching that sort of scale would mean we’d stop being Subaru.”

Takaki Nakanishi, founder of Nakanishi Research Institute Co. and Japan’s top-ranked auto analyst this year by Institutional Investor magazine, said Fuji Heavy would be better off staying small in the auto market.

“Subaru is a niche product,” Nakanishi said. “They have a strong partner in Toyota, which is complementing Subaru’s product development so that they can focus their strategy on being a niche player.”

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